As a registered Debt Agreement Administrator, Debt Busters are authorised to prepare and lodge a debt agreement proposal on your behalf. Debt agreements allow you to make regular repayments based on what you can afford – not what is owed. Plus, we deal with your creditors directly, so you don’t have to worry about that.
How It Works
A debt agreement is a legally binding agreement between you and your creditors. It provides the opportunity to repay one fixed weekly, fortnightly or monthly amount, based on what you can afford – not what is owed. Once your debt agreement is accepted, your creditors agree to freeze the outstanding balance of your included debts and cease any further interest, charges, and fees. In simple terms, it is a formal payment arrangement where creditors agree to clear the remaining balance of the listed debt at the end of the debt agreement. This means you will save considerably when compared to paying the debt in full over the same period of time.
Advantages of a Debt Agreement
A debt agreement can provide much-needed relief if you’re unable to manage your debts. Advantages include:
- Avoid bankruptcy;
- Paying what you can afford, instead of what you owe
- Your debts won’t gain interest
- Unsecured creditors can’t continue to pursue you
Things to consider
A debt agreement is an excellent way to become debt-free, however, there are a few things to consider when deciding if it’s the right option for you:
- You will be unable to borrow while in a Debt Agreement, as it is listed on your credit file for a period of minimum 5 years
- Your details will be listed temporarily in National Personal Insolvency Index (NPII)
- Debt Agreements are regulated by the Australian Financial Security Authority (AFSA) who oversee all insolvency proceedings in Australia. They review and process all Debt Agreement Proposals prior to sending it to your creditors for their vote
- As long as the majority of voting creditors accept the proposal, the Debt Agreement Proposal becomes accepted and legally binding for all creditors
- All insolvency proceedings in Australia are regulated by the same law – the Bankruptcy Act. Therefore, proposing a Debt Agreement Proposal is considered ‘an act of bankruptcy’, however, we emphasise that this is not the same as going bankrupt. Visit the AFSA debt agreement page for more information
It is important to us that you make an informed decision. You can read more about Debt Agreements and compare other debt relief options directly on AFSA’s comparison page.
